'Farm to fork deserves more discussion'

In Brussels they are out, the Common Agricultural Policy (CAP) can continue for a number of years. The discussion in recent weeks has mainly been about details and percentages. They agreed at an earlier stage with the European Commission's proposal about the introduction of eco-schemes and more scope for implementation per Member State via a national strategic plan.

This is actually quite striking: the major discussions about the most effective and efficient instruments for conducting agricultural policy seem to have faded into the background. Dutch farmers' managers are more concerned with price formation in the chain and with national environmental policy than with the question of whether European agricultural policy is on the right track.

Policy instruments are reviewed
There was a time when the best policy instruments were searched diligently. In my bookcase I came across the dissertation of Frans Kriellaars, who obtained his doctorate in Tilburg in 1965 on "Problems of agriculture in the process of structural changes in general economic growth". Kriellaars described this problem strongly in his concluding remarks with a quote from the American economist George Schulz that, in short, it means that there is always something wrong with agriculture. Or there is a lack of food, because too few means of production flow to agriculture. Or there are surpluses and low incomes, because too few means of production such as land and labor are withdrawn from agriculture. The transfer mechanism between agriculture and the rest of the economy therefore often functions only moderately.

In the 20 years between the end of the Second World War and the work of Kriellaars, the necessary literature on this problem had appeared in America and Germany, among others, which is discussed in detail in the thesis. It was also the time when the government got quite involved in the details of the economy. Numerous government instruments are therefore reviewed, from influencing market prices to producer bonuses and production control.

Quotas as market certificates
The quotas belonged to the latter category even then. Kriellaars saw these as a kind of market certificates, you needed them to gain access to the market. He saw advantages in them, especially if they were tradable: "This way the agricultural entrepreneurs regain their freedom of movement". The idea was that you could sell the quota of crops that you are no longer interested in and that you can buy crops in which you do see something. And it would be good for the development of the structure of the industry: "Business growth can also be promoted by making it easier for a number of operators - because they can monetize their quota - to give up all or part of their business".

It took another 20 years, but then with the introduction of the milk quota, the theory was also put into practice. And another 30 years later, we see the principle reflected in tradable emission rights such as phosphate rights. Incidentally, the author also saw advantages in many other instruments. He ended his thesis with another quote: "It is the beginning of wisdom in agricultural policy to recognize that there is no perfect solution". The author went on to play an important role in the advocacy of interests on behalf of the KNBTB with his acquired knowledge. And become a professor of agricultural economics at his alma mater.

Good discussion for healthy food
You may wonder whether 55 years later the discussion about instruments should not be made more prominent again. And in particular the policy options for agri-environmental policy. The European Commission's Farm-to-Fork proposals only played a role in the background in this round of CAP negotiations. Much to the regret of super commissioner Frans Timmermans.

But the Commission is now working on legislation around that Farm-to-Fork strategy, and we will undoubtedly be in a mid-term review of the CAP in a few years' time. A good discussion with which instruments you can efficiently achieve the goal of a food system that provides sustainable and healthy food in times of climate change does not seem so strange to me.

Krijn J. Poppe

Krijn Poppe worked for almost 40 years as an economist at LEI and Wageningen UR and now holds a number of advisory and management positions. For Boerenbusiness he dives into his bookcase and discusses current developments on the basis of studies that have become classic.

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